(The following article by Stacie Hamel was posted on the Omaha World-Herald website on June 3.)
OMAHA, Neb. — Union Pacific Railroad has filed a lawsuit against two model train manufacturers, claiming trademark infringement and unfair trade practices.
At issue are U.P.’s current shield logo, its Building America slogan and its locomotive colors of yellow, gray and red. U.P. holds trademarks for the use of the designs and colors on products.
The lawsuit, filed in U.S. District Court in Omaha, claims that Lionel LLC and Athearn Inc. are selling model trains bearing the logos and colors and that those products could confuse or deceive consumers. U.P. asks for the companies to comply with the trademarks and for unspecified damages. Lionel is based in Chesterfield, Mich., and Athearn in Compton, Calif.
A Lionel official declined to comment on the lawsuits. Athearn officials could not immediately be reached for comment.
Union Pacific Railroad started its brand-licensing program about two years ago, charging fees for use of its logo or the logos of railroads it has purchased over the years. The program aimed to land the logos on a wider range of merchandise, from clothing and lunchboxes to mugs and plates, resulting in significant revenue.
“We’ve said from the beginning that we were going to protect the rights to our identity,” said Bob Turner, senior vice president. “We waited almost two years from when we announced the licensing program, so I think we’ve given everybody plenty of time to work with us.”
U.P. also assured the approximately 60 companies that have signed agreements that the company would protect the value of their licenses, he said.
Charging fees for model train cars aroused emotional outcries by hobbyists and model manufacturers, who objected to the change after years of what they described as goodwill-building for railroads.
The most emotional outcry was over fallen flags – the logos of railroads that no longer exist, having been merged or purchased by other railroads. U.P. has filed for trademark rights to numerous fallen flag logos and maintains that it has the right to control their use.
The lawsuit, however, is over logos still in use. The Building America ad campaign began in the fall of 2001, after an employee suggested that the railroad put flags on its trains after the Sept. 11 terrorist attacks.
“These are clearly new logos for us, and just as clearly these companies have started using them since we filed and received copyright protection,” Turner said.
U.P. has not been contacted by Lionel or Athearn regarding why either company has chosen not to become licensed, he said. U.P. met with both companies shortly after the program was announced to explain the licensing process, he said.
Companies do not have to agree to license all of U.P.’s logos, Turner said.
“They can be unique to a particular mark.”
Lionel has a brand licensing program of its own, charging fees for 35 manufacturers to use its logo on products. Last year, the company also trademarked the colors orange and blue for the toy category.
“So they understand how these programs work,” Turner said.
A Lionel official declined to comment on whether it had ever sued over trademark infringement under its licensing program.